Proterra Raises $23M More To Roll Out Electric Buses Nationally
November 26, 2012
November 21, 2012
(c) 2012 Dow Jones & Company, Inc.
A company providing the public transportation industry a quiet and low-emissions alternative to traditional diesel buses, Proterra Inc ., raised $23 million in a Series B round of venture funding, it announced Wednesday.
The company manufactures its EcoRide brand heavy-duty electric transit buses domestically in Greenville, S.C.
Since closing its last, $30 million round of venture capital in 2011, the company has managed to sell its buses to seven different U.S. transit authorities. Passing federally required tests of durability and reliability at the Bus Research and Testing Center in Altoona, Pa., helped it crack open the domestic market.
"It's a completely different story for the company now, in terms of the momentum for customers taking this seriously in the transit space," said Proterra's Chief Executive David Bennett . "We have an [electric] vehicle that runs all day long, saves them money [on fuel and maintenance] and provides a more attractive environment for riders, and seven huge customers that help us prove that to other agencies."
The "payback and economics" promised by electric vehicles in the car market only work for the wealthy, Mr. Bennett noted. That limits the market for cars like the high-performance EVs made by Tesla Motors Inc . or Fisker Automotive Inc . But in the market for "moving people," electric vehicles offer a significant "payback and better economics" in the first year cities and other organizations start using them, Mr. Bennett said.
Hennessey Capital Management led the Series B investment in Proterra, joined by NMT Capital along with Proterra's earlier investors 88 Green Ventures, Kleiner Perkins Caufield & Byers , GM Ventures, Mitsui & Co. Global Investment and Vision Ridge Partners .
With this funding, Rajiv Ghatalia, president and founder of Hennessey Capital , will join Proterra's board as an advisor.
Mr. Ghatalia said the market opportunity for electric buses in North America alone represents a huge one, especially as the cost of fuel rises here, and cities work harder to improve air quality and noise levels at the behest of environmental regulators and citizen activists concerned about these matters.
Proterra appealed to his fund, he said, because "We love the management team...And these people have a tech that works here and now, is on the road as we speak, actually creating a value proposition that's huge."
In the next 18 months, investors expect Proterra to use its new capital to ramp up operations. "The orders are coming in nicely, and now we need to make sure the product gets out just as nicely," Mr. Ghatalia said.
In the summer of 2012, President Barack Obama signed a bill called "The Moving Ahead for Progress in the 21st Century Act", or MAP-21, that could prove a boon to companies like Proterra that supply the "surface transportation" industry and public transit groups in the U.S.
Proterra's ancillary markets include college-campus transportation providers and airport-transportation providers. But the company's immediate focus remains in North American cities.
Electric-vehicle makers that compete with Proterra, including Smith Electric Vehicles Corp ., MUNI Skoda / Electric Transit Inc. or Daimler AG , focus on trucks, vans and shuttles, or hybrid and natural-gas buses, more than large all-electric buses.
Proterra claims its buses charge faster than any other all-electric models on the road in the U.S. They take about 10 minutes to fully charge, according to the company website.
Write to Lora Kolodny at email@example.com. Follow her on Twitter at @lorakolodny